Wednesday, February 1, 2017

On Monday, the Press Democrat’s editorial board described a
“brewing fiscal crisis” for Santa Rosa's schools, who must, as of their first
interim report for 2016-17, implement a ~2.2% budget cut going forward. SRCS is confronting flat enrollment coupled
with declining rates of return on pension funds, that will increase budget pressure over the next
four years. At least one board member’s suggesting a parcel tax in
response.

The editorial describes a problem familiar to Sonoma Valley Unified. SVUSD will implement a ~5% budget cut in a similar fashion to SRCS. While Santa Rosa must deal with a 1.6% reserve reduction due to an
accounting error, and Sonoma Valley's audits have consistently been clean, it is the
medium-term funding squeeze, with costs rising substantially faster than
revenues, and an increasing inability to make up the difference via one-time funds, that’s driving concerns. SRCS' potential pursuit of a parcel tax is one solution that certainly appears to be on the table, but it could cause voter confusion, if not outright fatigue, given Santa Rosa's successful $229 million bond in 2014. As Jenni Klose, president of the SRCS board noted in a letter to the editor today, "[SRCS], as with all California districts, is simply wrestling with how best to meet its increased pension obligation while continuing to fairly compensate staff[.]"

Sonoma Valley, grappling with the same situation, should investigate creating structural, long-term
advantages to ensure our teachers and staff aren’t crushed between stagnant
funding and our ever-rising cost of living. Housing remains the single largest expense
for many teachers and staff, whether laterals or new graduates. Meanwhile,
those further up the step-column need salaries that can pay for mid-life expenses, such
as children starting college. Addressing one issue means more’s available to
deal with the other. Much as our schools confronted rising power prices by getting on the supply side of the equation with solar panels, so too should our district
pursue construction of high quality, reasonably priced teacher and staff
housing, an advantage in recruiting and retention independent of state funding.

The cost advantage has four parts.
First, the District owns the land, and thus land costs are not included in the
cost of ownership or operations. Second, the capital structure allows for tax-exempt finance. Third, the land and construction are both property tax-exempt.
Finally, there is no profit -- rents are set at a level sufficient to pay back
costs of construction, financing, maintenance and operations, and to fund a
long-term reserve.

Despite such success, few K-12
housing projects have gone forward since, due to an aura of legal uncertainty. Is
restricting residency to teachers and staff consistent with California’s Unruh Civil Rights Act? Can land held in educational trust be used for teacher and
staff housing? Can Certificates of Participation be used to fund construction?
Can schools cooperate with other agencies on projects? Are there legislative
findings that the housing crisis is hitting teachers and staff?

What of the hospital, the current
owner? Hospital sites must be “multi-decade,” allowing new buildings to be
constructed as others pass from use, like a wave traversing the property over
decades. For now, the MacArthur parcel is surplus to requirements. But the two
districts could allow for a future exchange of land with fair compensation. The
Andrieux site could become housing and MacArthur a hospital, when contemporary structures reach their end of life.

There are any number of problems
that could interfere with teacher housing at this site (or another), but the rough contours are clear.Making sure teachers and staff can afford to
live in our community was the first item I discussed when walking Sonoma door
to door this past fall. There are few more effective proofs of the power of
small-town cooperation, especially in the face of discord we now
witness washing over our small valley.Let’s get our government agencies talking about working together, and let's set an example, by having our health
care and school districts discuss how they might make this land continue to
serve the public interest for decades to come.

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